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Small-Scale Question Sunday for September 15, 2024

Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?

This is your opportunity to ask questions. No question too simple or too silly.

Culture war topics are accepted, and proposals for a better intro post are appreciated.

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The idea that GDP is fake is mostly cope (and I say that as an European), but there is a nugget of truth in it as a lot of things rich societies spend money on really is 'fake' in a way:

  • Positional goods. Things that only/mostly benefit you if you have better stuff than everybody else. This includes luxuries like fashion, but also much of higher education, and all ways people price out poor people to e.g. not having to live next to them.

  • Waste. The government spending a gazillion dollars on a 4-year environmental pre-study for some infrastructure project without any tangible result absolutely counts as GDP but doesn't really benefit society much.

  • Paying for results that other people get for free. If you live in a high-crime area and have to spend a bunch of money on replacing stolen goods, security, insurance, fixing vandalism etc. you are contributing to GDP even though somebody living in a low-crime place get that automatically.

This has probably always happened in all societies to some degree or other, but it's just more prevalent in the richer ones that can afford the slack.

I'd like to add one more point:

  • Companies pumping money back and forth that actually does very little besides making lines go up and filling slides in shareholder presentations. If you have advanced financial markets or advanced insurance markets, this is easy to "grow" organically. But all large/"modern" companies like to partake in schemes like that: complex compliance infrastructure, management consulting contracts, software as a service, ect.